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Compliance and Fraud Resources

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Brooklyn Man Charged With Stealing $2.3 Million RE Loan

By James Comtois

A Brooklyn man has been arrested on charges connected to stealing a $2.3 million real estate loan through companies he created, according to Nassau County district attorney Kathleen Rice.

The charges allege that Mayer Goldberger secured a short-term loan for $2.3 million from BRT Realty Trust, a Great Neck, N.Y.-based real estate investment trust. The loan was to be secured by a first mortgage on real property owned by Hartford LLC and located in Connecticut, and the personal guarantee of Goldberger.

As part of the scheme, Goldberger allegedly caused Speedy Title Services LLC, a company he created, to prepare a title report that failed to disclose the existence of an outstanding mortgage on the property that Hartford issued to New York Community Bank for $3 million, but included an apparent bogus 2007 mortgage allegedly issued by Hartford to Hartford & York, another company in which Goldberger was the sole member, for $2.8 million.

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Pennsylvania Governor Signs Fraud Protection Bills

By James Comtois

Pennsylvania Gov. Edward G. Rendell signed a pair of bills to combat mortgage fraud in the state by strengthening communication between homeowners and their lenders and encouraging employees at mortgage companies to report illegal activity.

The first law, Senate Bill 170, sponsored by state Sen. Mike Brubaker, R-Lancaster, will prohibit a mortgage broker or originator from being the sole recipient of communications from lenders. The legislation would prevent brokers from withholding information about interest rates, fees or monthly payments and it would help ensure that consumers receive monthly statements and other notices intended for them by their lenders.

The second measure, House Bill 985, is a companion bill sponsored by state Rep. David Kessler, D-Berks, that will shield mortgage company employees who report illegal activity or take part in an investigation from retaliation through reduced salaries, termination or other actions taken by their employer. Currently, those protections only apply to these employees when they report a violation of the state banking code, but not if they report a violation of other law.

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Voice of the Industry

Fraud in Conforming Loan Files - A Problem for Everyone

Perspectives by Frank McKenna

I wanted to give our readers insight into a real problem that will probably affect them personally in the years to come. That problem is high levels of fraud and misrepresentation that are still occurring on loans that are being originated and sold to Fannie Mae and Freddie Mac. Loans that are packaged and sold to them by lenders are known in the industry as "conforming" loans since the loans fit the more traditional and "safe" type of loan programs free from the types of risk that occurred in nonprime loan programs.

While one could argue that these conforming loan programs are safer in general, the notion that these loans are free from fraud risk is a misconception. According to BasePoint research, these loan programs do in fact have high rates of fraud that impact the performance of loans. As we have seen from the past three years, fraud impacts everyone, particularly when the financial impact of it is shouldered on taxpayers and responsible homeowners.

So why should we all be concerned? I will give you a few reasons to consider.

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Legal Corner

By Herman Thordsen

TAYLOR, BEAN & WHITAKER OF FLORIDA SETTLE CHARGES THAT IT ALTERED INCOME AND ASSETS TO FUND NONTRADITIONAL LOANS

FACTS

Taylor, Bean & Whitaker Mortgage Corp., Ocala, Fla., will pay $9 million to settle a dispute with 13 states and the District of Columbia over how the wholesale lender handled certain nontraditional mortgages. TBW also agreed to modify loans for certain customers and to hire an independent firm to review nontraditional mortgages originated in 2006 and 2007. The settlement resolves claims that TBW altered applicants' incomes and assets to provide nontraditional mortgages. The mortgage lender did not admit wrongdoing as part of the settlement, which was reached with regulators in Arizona, Florida, Georgia, Idaho, Illinois, Louisiana, Maryland, Massachusetts, Mississippi, New Jersey, North Carolina, Pennsylvania and Vermont. (nmn62309)

MORAL

If you are doing a loan modification and this is the original lender and the loan was nontraditional you may want to discuss analyzing the loan for this violation and request that TBW put the borrower into a traditional mortgage. Be careful of how you word it and consult your attorney first because the wrong wording could get you into legal problems.